The market is finishing the week in a negative mood – down 32 after a late sell off on Wall Street overnight. It was down 56 earlier on. The SFE Futures suggested 64 point fall in the market this morning.
The Dow Jones lost 120 overnight – It moved in a 203 point range and finished in the red for the second consecutive session on talk of further credit market losses and lower than expected profit results. Similar to yesterday, the Dow was holding up well before being sold off late in the session. There is talk that Fannie Mae (down 10%) will reveal credit market losses in its upcoming earnings report, and Wells Fargo CEO told a NY conference that home equity losses are likely to increase in the 4Q and that the housing market is in the worst state since the Great Depression. Financials took another beating after Barclays Group announced write downs worth $2.7bn in the 3Q – Wells Fargo closed down 4%, Citigroup lost 4.1% and Lehman Brothers fell 3.8%. J.C Penny announced a 9% fall in 3Q earnings and cut their 4Q outlook due to slowing sales, and Ralcorp Holdings closed up 10% after announcing it would buy Kraft Food Inc.’s Post cereal division for $1.65bn plus $950m in debt. The NASDAQ also struggled falling 1%.
Not a lot happening today…
- According to the AFR, Fortescue Metals (FMG) will soon announce Chinese group, Baosteel, is taking a stake in the company. It had a huge day yesterday putting on 18% to close in record territory and lifting CEO Andrew Forrest past Dick Pratt as Australia’s third richest man. FMG now has a market cap of $17.1bn with Forrest owning 35% of the company. FMG taking a breather today, down 138c to 5982c.
- The Federal Court of Australia has approved the merger between Adelaide Bank (ADB) and Bendigo Bank (BEN), the merger has now received all of the necessary legal, regulatory and shareholder’s consents and is all ready to be finalised. BEN up 3c to 1354c, ADB down 8c to 1430c.
- Aquarius Platinum (AQP) down 98c to 3900c after announcing it has closed a shaft at its Kroondal mine in South Africa after a worker was killed. The company doesn’t know how long the operations will be suspended for.
- Timbercorp (TIM) announced a FY07 NPAT of $65.7m, down 19% from last year and below what analysts had expected. Were’s maintain their SELL recommendation and their 221c target price, 40% above the current share price, saying “we see little prospect of outperformance in the near term”. TIM down 2.5c to 156c.
- Westpac Banking Corp. (WBC) began funding new RAMS loans after completing funding arrangements for up to $500m. They will fund all new loans settled by RAMS until the completion of the acquisition of the RAMS Home Loans distribution business but said the funding would stop if shareholders didn’t approve of it. WBC down 55c to 2767c.
- Zinifex down 67c to 1542c after a huge rise yesterday on the back of takeover speculation. They have also appointed a new CEO, Ex MD of Western Mining Andrew Michelmore, who has spent the last 2 years as CEO of EN+, a Russian energy and aluminium company. He will begin immediately. Citigroup maintain their HOLD recommendation and 1520c target price saying “Use it or Lose it”, referring to Zinifex’s cash holdings acquired after the float of their smelting businesses.
· Lots of AGM’s on today, most notable Brambles and Woolworths.
- Companies going ex dividend today include LSL and NAB (95c)
We will have the usual lists of the CHEAPEST STOCKS in the ASX 200 in the Marcus Today Newsletter later today along with the a list of the stocks with the highest gross yields. We also have an article entitled “The problem with Plastic Christmas Trees”.
MARCUS TODAY – “Inform, Explain, Educate, Entertain”.
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